What is a folio in hotel?

A folio meaning is an invoice or a bill that includes charges such as room, charges from hotel restaurants, telephone, minibar, spa, recreation, laundry, and any other additional purchases made by the guest during their stay. When the guest checks out, the hotel presents this hotel billing to the guest in the printed form of records containing these financial charges for collecting the payment.

Folio charges

Types of charges can be, revenue, non-revenue, adjustments, discounts, paid-outs, refunds, and payments.

• Revenue: Charges that contribute to the hotel’s revenue. For example, room charges.
• Non-revenue: taxes, because these are government levies. With every sale, the hotel collects taxes that will be given back to the government. These are collected as percentages of the sale as regulated by the local government.
• Adjustments (Also called, Allowances): These are charges posted to adjust an already posted charge by reducing or increasing. For example, a cashier posted $1000 instead of $100. Posting $-900 in this case to adjust.
• Discounts: Posted to reduce an already posted charge when it is needed to give guests a discount.
• Paid-outs: These are charges that are neither revenue nor taxes, meaning these charges don’t contribute to the hotel’s revenue or government levy. For instance, a guest in-house arrives at the hotel and he/she wants some local currency to pay taxi charges. He obtains this money from the front office cashier who will post a paid-out to affect his cashier float and take it later or at the checkout from the guest.
• Refunds: These are payments paid by the guest and when the hotel wants to pay back (return) for whatever reason.
• Payments: These are payments made by the guest. This includes deposits, additional payments received by the guest during the stay, or settlement payments. This includes, but not limited to, cash, VISA, MASTER, DINNER, or any other credit card or similar payments.

The purpose of folios

Hotel folios help:

• Keep a record of guests’ charges and track them for both hotels as well as the guests.
• Generate invoices upon checkout.
• Reconciliation of accounts and ledgers as posting charges is the first journal entry into the hotel’s accounting system.

What is a folio number?

A hotel reservation confirmation number is always one and unique for a booking. However, a guest can have multiple folios under his/her booking. For example, a guest can have a folio addressed to him/her and another folio that is addressed to his/her company. So, each of these folios has its own billing window and a unique folio number for tracking, retrieving, or reconciling folios from the system.

It is also called invoice number or bill number.

The post Define Folio first appeared on e360 hospitality.

A guest’s journey starts with a reservation, which is the first interaction a guest has with the hotel. Reservations are a bilateral contract where the hotel agrees to reserve a room for the guest for a specified period at a rate the guest agrees to pay.

Reservations Department

Hotel Reservations Departmental Chart

Reservation Process In Hotel

7 Steps of Reservation Process

3 Types of Reservation in Hotel

The post What Is The Role of Reservation Department? first appeared on e360 hospitality.

What Is the Primary Function of the City Ledger?

City ledger is a traditional term used only in the hotel industry for Accounts Receivables, and we know that Accounts Receivable or AR is credit sales.

In the early days, hotels only provided credit facilities to companies within the city limits wherever the hotels were located. They maintained the receivable records in the ledger, which they called the ‘city ledger’.

The hotels use the city ledger to record credit sales, track the aging of pending payments, and send reminders and statements to the companies that owe the hotels for collection purposes.

City Ledger Example: How Does City Ledger (Direct Billing) Work With Hotels?

1. A company (travel agent or governmental organization) requests for direct billing (City ledger) privilege from the hotel.
2. The hotel’s sales department works with the company to obtain relevant documents and checks the eligibility in line with the hotel’s credit policy. Note: Depending on the checks and eligibility of a company, the hotel determines the credit limit.
3. Once approved after fulfilling the standard procedures, the hotel is ready to accept the guests sent by the company for direct billing. 
4. Individual guests, despite being booked by credit-approved companies, should be authorized by the hotel front office manager or supervisor before his/her charges can be settled to the company’s city ledger account (also called, AR accounts).
5. City ledger authorized guests when checking out, the hotel cashier will settle the charges to the city ledger payment method instead of cash or credit card. These charges will automatically be transferred to guests’ company accounts in the city ledger.

Are All Charges Settled to the Company City Ledger?

It depends on the contract between the hotel and the company, and what has been authorized on an individual guest basis.

Usually, companies cover room, food and beverage, and laundry charges, while any incidental and miscellaneous charges are the responsibility of the guests.

In the above situation, the hotel will split the guest’s bill and settle the company’s part to the city ledger, while the guest will pay for other charges.

City Ledger vs Guest Ledger

Every time a guest consumes a hotel service or product, the charges are posted to the guest’s bill while the guest is still in-house and the bill is still not settled. These charges are recorded under the guest ledger (also called, the front office ledger).

When the guest checks out, the charges are transferred to the respective city ledger account of the guest’s company. From here on, the charges will reside in the city ledger (or accounts receivable ledger) until the company settles the due amount. This is the reason the city ledger is called the ledger of non-guest transactions.

Aging of City Ledger

Since transferring a guest’s balance to the city ledger, the aging process of the credit starts and is counted based on the number of days. It is the responsibility of a hotel’s Account Receivable team to collect the payment from the companies.

They send reminder letters such as 1st reminder for 30 days, 2nd reminder for 60 days, and so on. After a certain number of days and not settled (depending on hotel policy), the credit policy will be suspended.

The post What Is City Ledger In Hotel? first appeared on e360 hospitality.

You can get a refund on a hotel room after checking in, if:

• You haven’t made any transaction (such as a minibar purchase) that has been billed to your folio. In this instance, you will have to go through a checkout process.
• The hotel has provided a room that is not as advertised.
• Force majeure – You must cancel your reservation immediately after check-in due to a situation that is out of your control, due to natural disaster forecasts, or unplanned events such as an announcement of a lockdown we experienced during COVID-19.
• For any other reasons, a refund is completely at the discretion of the hotel management.

Quick Link: Hotel Cancellation Policy – Complete Guide

However, suppose you refuse to take the room in unacceptable conditions and the hotel is unable to provide an alternative room or offer a free upgrade. In that case, the hotel is obliged to refund. Or, if it is due to an unforeseen situation you cannot continue with your stay, it is up to the hotel to decide to provide a full or a partial refund, if you talk to the front office manager.

Remember, for hotels, the loss is more than the guest who pays a penalty fee for last-minute cancelation. The cancelations after check-in cost hotels more than canceling reserved bookings because of staff time, and stationery costs. Specifically, the hotel may have lost an opportunity to sell the room to a more profitable guest and ended up looking to fill the room at the eleventh hour.

Canceling a checked-in guest in Opera PMS.

e360 Hospitality Solutions partners with hotel solutions providers and hotel systems vendors in operations training and PMS integrations. Occasionally, we also conduct a series of group training for hotel staff.

We have been operating since 2015, and our team is comprised of seasoned professionals with each of them having over a decade of industry experience and have worked with some of the leading major chain hotels and the world’s No. 1 property management systems developers.

Contact us for PMS integration (Including widely deployed and leading PMS on the market), advanced hotel operations training, revenue optimization, and hotel website accretion projects.

Schedule a consultation

The post Can You Cancel A Hotel Reservation After Checking In? first appeared on e360 hospitality.

Note: Hotel inventory is perishable, meaning the rate is set ‘per night’, a room that was left unsold yesterday cannot be sold again. The hotel lost the opportunity to convert that room night.

They set multiple room rates for the same room as said-above to sell on different market segments such as transient, group, corporate, etc. And of course, the room rates can go up or down based on demand, like in any business, when the demand increases, the room rates go high, and when the demand decreases the rates get lower.

How do hotels calculate a room rate? 

A hotel’s room rate is determined by operating costs, investments involved, annual target revenue, customer segment, and supply and demand. The hotel should attract and increase bookings without affecting room sales.

Calculating room rates in hotel

To make things look easy, a new hotel uses one of the below methods to calculate its room charges:

Market-based pricing

A Market-based pricing approach is focused on consumers, so market segmentation becomes crucial as we discussed below. Here, hotels determine what the end customer is willing to pay for a room type and work backward on that price to achieve a reasonable but profitable return by cutting costs.

Research on competitor pricing becomes a major part of it. For instance, check on competitors from the same location on what their rates are during peak and off-peak seasons.

Cost-based pricing

In this approach, hotels decide on the room rates based on the construction and running costs involved and then add the profit margins to meet the desired return on investment.

For instance, Selling Price = Total cost (construction & running costs) + Fixed profit percentage expected at the end of the year.

There are two formula-based calculations for this: 

Rack rate in hotel

Every room type has its default rate, which is the Rack rate or standard rate. The rack rates are the highest room charge for any room type a hotel charges. This is also called the published rate and in certain jurisdictions, the hotel has to submit rack rates of each room type to get a hotel operation license from tourism or relevant authority.

It is also important to note that rack rates are not discounted and can be with or without the breakfast included. These rates are primarily targeted for walk-in guests and transient (individual travelers with short notice). And, hotels price other rates based on this rate as the ceiling.

Room rates example

The pricing of rooms is one of the major factors in hotel revenue management, so the room rates often change mainly due to the supply-demand factors, just like your air ticket. 

Hotels, before starting their operations, set a crucial rate by calculating the standard room rate (rack rate) for each room type (see section, “How do hotels calculate a room rate?”).

Hotels have the standard room rates set, while the front office/reservations agent will try their best to sell rack rates for any walk-in guest, hotels do offer discounts on rack rates depending on demand — These rates are called BAR or Best Available Rates, for instance, BAR1–10% discount on days when the occupancy is less than 70%. BAR2–15% discount on days when occupancy is less than 65%, and so on. 

1. Rack rate

The hotels’ standard rate for each room type is discussed above in detail.

2. BAR — Best available rates

This is the best rate for transient/individual guests who don’t qualify for discounted or corporate rates. BAR rates fluctuate from Rack rate based on demand. For instance, a hotel can sell a room for a 10% discount on occupancy between 70% and 80%, and so on. The next day, this rate can be higher by 5% when the occupancy reaches 90% plus. The rate amounts and discount percentages are completely up to the hotel’s rate strategy.

3. Negotiated rates

The term, Negotiated Rate is generic. It basically means that there is a negotiated agreement between the sources and the hotel. Sources can be companies, travel agents when sending large groups, government, and sometimes even individual regular guests. So a corporate rate also comes under a negotiated rate in that sense.

4. Member rates

These are discounted rates with sometimes other facilities such as WiFi for members, who have signed up for the hotel’s or the chain’s loyalty program.

5. Group rates

These are often negotiated, discounted rates but for groups, allotments, etc., based on the number of rooms the booker requests. This rate can be further broken down into wholesalers such as tour operators, corporate groups, offline travel agents, or transient groups.

6. Complimentary rate

When a room is not charged, hotels use this rate rather than putting a 100% discount on other rates for statistics and accuracy on room revenue calculations without affecting segment-based tracking (ADR, RevPar calculations). Usually, hotels offer complimentary rates for suppliers who work on short-term hotel projects, tour group leaders, travel agents, or for marketing purposes.

7. House rate

Similar to Complimentary rooms, but for hotel employees, chain staff such as trainers and pre-opening staff, etc. ADR and RevPAR are also not calculated.

8. Day-use rates

Special rates when the guest’s check-in and check-out dates are the same — same-day checkouts.

9. Package rates

These are not separate rates though they can be. Normally, it can be any rate that has packages inclusive such as breakfast (Bed & Breakfast), half-board, full-board, golf course, and spa treatment included. These other products are charged at a single discounted rate which would otherwise be more expensive to buy them separately. However, internal departmental revenue tracking happens without guests noticing.

10. Promotional rates

These rates discounted or come with additional products included, are often non-cancelable, meaning hotels can nearly guarantee occupancy. Then it helps hotels increase revenue during peak or off-peak seasons.

What are the market segments in hotel industry?

Because a market segment is a major factor affecting room rates, we want to give you a brief idea.

In any business, you want to understand what type of customers bring you business and line up your sales and marketing efforts. 

In hotels, they classify guests into market segments where each group of guests has its own behavioral patterns. This segmentation helps hotels offer guests products and services that match their profile, preference, and financial ability to satisfy guests and maximize the hotels’ profitability.

For instance, Transient (individual traveler) segmentation can bring in more room rates compared to Group segmentation, but it can be less profitable to hotels considering distribution costs such as travel agent commissions, credit card commissions, marketing, etc. This helps hotels with their rate strategies.

There are no set rules, predefined metrics, or limitations on what market segments a hotel can have since every hotel has its own business strategy. However, below are a few popular segmentations:

Hotel market segmentation example

Nowadays, hotel rates are often linked to market segmentation, meaning hotels plan their room rates based on guest types which helps hotels increase their revenue while providing the best product and the rate for the right guests.

5 Core market segmentations

Below are a few of the common market segments. However, a hotel can have fewer or more depending on their requirements. Again, each of these main market segmentation can subdivided into several other market segments depending on the need.

Relationship between room rates and market segments example

Customer-focused rate structure is a modern and widely used approach that allows hotels to consider customers’ ability and willingness to pay for their booking. This helps hoteliers to be on par with the competition.

So, the rates are designed and created for segments that directly target customers. And, this helps hotels to track and compare their revenue by segments to fine-tune and improve potential areas accordingly to impact overall revenue.

The post Room Rates in Hotel: 10 Seed Rate Types first appeared on e360 hospitality.

What is a hotel bill? Every time a guest reserves a hotel room, the front desk opens a bill associated with the reservation for billing and invoicing. The hotel cashiers and other systems post the charges and payments of the guest to the bill.

The billing with its itemized postings acts as a statement of charges throughout the guest’s stay. When you print this billing, it becomes an invoice, which in hotels’ terms, is a guest folio. And, after the guest checks out, the financial data stays with the guest’s profile in the hotel management software for historical and statistical purposes.

If you’re looking for hotel billing software, check out here for a comparison.

Let’s, have a look at what a typical guest billing window in a hotel looks like:

What Are The Benefits of Hotel Billing System?

• The hotels don’t use an invoicing software even though it is a business like any other. But hotels use a comprehensive property management system which has its invoicing module for posting hotel charges.

• Hotels sell their products and services to the customers (guests) to make revenues to run the business and make a profit. 

• A guest bill is opened from the time the guest checks in and closed when the guest checks out settling the bill. During this time, the hotel posts various charges on the bill and collects payment at the checkout.

• Billing is a must for printing invoices, which is a legal requirement, keeping track of guest consumption and payments. And, it is the first entry point of a journal (posting) into the hotel’s complex financial management.

Later in the post, we will simplify where a posting on a guest bill ends up on the financial reporting of a hotel. 

What Is The Content of Hotel Bill?

A guest folio, which is the print copy of the billing (‘billing window’ to be precise) in a hotel should contain the following:

1. The hotel info with the address and contact info.
2. Addressee name: It can be the guest’s name. Depending on whom the folio is addressed, it can also be a company name or a travel agent name. In the above image, you can see two windows, one for the guest and the other for his company.
3. Confirmation number (or booking number). Bookings that hotels receive through central reservation systems (if it is part of a group or hotel chain), OTAs (online travel agents), and other booking sites have an additional reference number that can also be part of the guest folio.
4. It should have a stay date range. Typically, this is the date range from the check-in date until the checkout date. However, if you print the folio in the middle of the guest’s stay, it can mean it is an informational folio, which the guest might have asked to print for whatever reason. Therefore ‘Folio Type’ indication would help understand better.
5. Other crucial details include room number, print date, and cashier who printed the folio.
6. Then comes the transaction details with the date posted, the description of the charge, and the amount posted, which can be positive if it is debit or negative in case it is a payment or adjustment transaction. More on this under section: What is an itemized hotel bill? 
7. Preferably, the guest’s and the cashier’s signature on the final / settlement folio.

What Is An Itemized Hotel Bill?

An itemized bill simply means that the bill contains the details of every charge separately. 

For instance, you paid $57.50 for your lunch check at the Atrium restaurant. An itemized bill should show the breakdown of your lunch check like Atrium Food: $30, Atrium Beverage $12, Tobacco $8, F&B Tax $6.3, and Tobacco Tax $1.2.

Hotels use charge codes to post each charge into the guest billing called ‘transaction codes’. These codes uniquely identify the charge type such as Atrium Food, Atrium Beverage, Tobacco, and so on.

How Does The Hotel Billing System Work?

Every PMS system has a section to handle guest billing, which works like a hotel billing software. Even though system-to-system might differ in features and user experience, they all work according to accounting principles, debits, and credits.

The List of Items In Hotel Bill

As discussed earlier section: What is an itemized hotel bill? you know what those items are. We will see briefly what defines these transaction codes.

At the top level, these charge codes can be Debit or Credit. No, not accounting here  A Debit is a charge a hotel posts when a guest consumes a hotel service or product. Credit is posted when the guest makes a payment.

Sample Debit / Credit charges (Remember, a hotel can use hundreds of charges depending on the level of details they want to track and report their revenue, for instance, they can keep it simple like Coffee Shop Food, Coffee Shop Beverage or they can drill down to Coffee Shop Food – Breakfast, etc., you got the point):

What Are The Types of Hotel Revenue?

If the transaction code is of ‘debit’ type, it should contribute to one of the below revenue types (revenue buckets) for the hotel to evaluate how each of the major sources performs and for other reporting and revenue management purposes:

The post Hotel Billing: What Is Hotel Billing Process? first appeared on e360 hospitality.

Every time you check into a hotel, you go through a registration process, that you may not notice. This process has several steps – one of which is a Hotel Registration Card.

A smooth and faster registration process is crucial for hotels as well as for their guests. When this first point of physical interaction with the guests goes succinctly, the guests are more likely to ignore shortcomings that may come their way throughout the stay.

Hotel guest registration process

If you think of the reservation and a reservation letter as an agreement between the hotel and you as a guest, the registration process is a final check and verification of both sides before the front agent hands over a room key.

Even though many hotels adapt to automating the process using kiosk terminals or mobile apps, the core purpose remains the same.

What is a hotel registration card?

A hotel registration card is often a single-page form with a summary of a guest’s hotel reservation details and hotel policies that have been verified by the hotels and acknowledged by the guest.

The information includes the guest’s name, address, dates, room number, room type, room rate, contact information, payment details, and the hotel policies that apply to in-house guests.

What is the use of a hotel guest registration card (GRC)?

A hotel registration card is might look redundant as the technology progresses, however, the fact is that a guest can stay at a hotel without making a booking/reservation, but not without a registration card, which is entry pass to staying at a hotel. And, some reasons:

• Meeting legal requirements: Even though the form itself might not be a legal requirement, the hotel can use a registration card to collect additional data to meet changing changing needs of regional jurisdiction. Because it is easier to change or add a simple quote on a local policy statement in the reg card than amending the hotel’s PMS systems.
• Emergencies: In case of an unforeseen, the hotel should know the details of in-house guests. Even in case of a fire or total system failure, a hard-printed form is preferred.
• Disputes: It helps in disputes. For example, if a guest refuses to pay for the damage caused by him/her, the hotel can pull out the registration card with a breakage policy on it with his/her acknowledgment.

A simple guest registration card template:

Also read,

Guest folios

Hotel confirmation letters

Reg cards in Opera PMS

The post Hotel Registration Card: What is the purpose of a registration card in a hotel? first appeared on e360 hospitality.

Turning a ‘hotel confirmation letter’ for the benefit of guests & the hotels.

When you book a hotel room, you enter into a contract with the hotel, whether the booking is guaranteed or not. The hotel sends this contract as a hotel confirmation letter to your email.

If you book through different channels than directly at the hotel, the booking site or other online travel agents send a confirmation email from their system. 

Is my booking number my confirmation number?

Yes, a reservation confirmation number or booking number is a unique identifier for your stay record in the hotel’s PMS (Property Management System) software if you make a direct booking with the hotel. 

If you make the booking through a CRS, OTA, or website, you get a booking number from these systems.

A confirmation number outside of the PMS is referred to as an external reference. Whether the booking is made at the hotel or via third-party sources, the hotel’s PMS maintains a confirmation number for every reservation.

Hotels can locate your reservation in their PMS using this external reference from your booking source.

Crucial information on a hotel confirmation letter

The confirmation letter details the agreement between you and the hotel such as booking number, guarantee type, rate, number of people, room type, dates, loyalty member number, additional packages, check-in/checkout times, amenities, and payment info you and the reservations agent agreed upon.

And, other crucial information includes the details of the hotel’s deposit and cancellation policy.

It applies to bookings made through third-party websites and OTAs.

A confirmed hotel reservation sample

Below is a sample hotel booking confirmation letter that provides a basic idea of what important info it should contain.

(And, if you book through a website or mobile app, you use the platform’s sophistication to choose your requirements and needs. Finally, the site/app sends you a confirmation email to your email.)

Other important hotel policy statements in the hotel confirmation letter

• Even though the above sample confirmation letter doesn’t mention hotel check-in/checkout time, it is also vital information that will be helpful to avoid confusion. 

Why is it important to send a confirmation letter for a hotel reservation?

Practically, it benefits both you and the hotel:

How useful are hotel confirmation letters/emails to travelers?

• It is evidence of a binding contract on mutual promises between you and the hotel — either you pay or promise to pay for a room at the hotel that agrees to hold a room for your stay.
• And, it is a confirmation that your booking request has been accepted and processed.
• You get your booking reference/confirmation number/external reference discussed above is the utmost important information in your confirmation letter. And, this number will be used by the systems and the hotel staff throughout your stay at the hotel for guest lookups and verifications.
• As a traveler, it allows you to verify that your booking needs are covered as promised while making the booking. For example, you don’t want to end up getting a double bed when you have requested a twin.
• It serves as proof of accommodation for visa applications for some countries, where a hotel reservation with hotel details is mandatory.
• In case, you need to cancel your booking for whatever reason, you know the procedure and if the hotel will charge a penalty for it. 

How does a hotel confirmation letter benefit a hotel and have the potential to go beyond?

• As a contract, it is beneficial for both parties, you and the hotel.
• At the time of check-in, it helps the hotel verify guests’ identity and helps make sure they are checked into the correct rooms.
• Hotel confirmation letter is a binding contract that includes mutual promises between a guest and the hotel. Can the hotel still change the rate later for a guest who booked a few months before? Yes, but with a statement in the confirmation letter. For example, “Rate is subject to change unless paid in full”, etc. So, the hotels have the option here to cover legal points with policy statements in it.
• As a first-ever touchpoint with customers, hotels can use confirmation letters as one of their marketing materials. Hotels can advertise products and services, and use CTAs to land the guests on a specific landing page to target additional/external conversion. 
• Drive traffic to the hotel’s mobile app or increase app downloads. Guests will be more than happy to use your mobile app if it can help simplify their stay. For instance, checking in without waiting in the queue or exploring the hotel’s restaurants and ordering food with guests’ smartphones.
• Some hotels already provide directions to the hotel that can help reach your destination faster.

Some Hotel Confirmation letter templates

Check out this URL for some free templates.

Other guest stationeries:

• Company Confirmation Letter
• Cancelation Confirmation Letter
• Guest folio

The post Hotel Confirmation Letter: It’s an Advertising Tool. first appeared on e360 hospitality.

What is a hotel folio? A hotel folio can be defined as a printed invoice that represents your hotel bill containing itemized charges, discounts, and payments posted by the hotel.

Examples: Room and Tax, Continental Breakfast, Laundry, 10% FB Discount, 5% FB VAT, and Cash Deposit.

How Do You Get A Hotel Folio?

Your hotel bill contains charges for accommodation, food and beverage, minibar, laundry, spa treatments, and any hotel services you consume and payments you make. When the hotel prints a copy of your hotel billing, it is your guest folio.

Your hotel bill is opened when you check into the hotel and kept open throughout your stay for posting charges, discounts, and payments until you settle the charges and check out.

• The hotel Front Desk agent must provide you with an ‘information folio’ whenever you request during the stay.
• With modern property management systems, you can view the folio on your smartphone and room TV during your stay.
• The hotel Front Desk agent must hand over your checkout folio (settlement bill) at the checkout.
• The hotel can provide or email you a copy of your final folio after checkout with your identity verified.

Note: Depending on the capability of the property management system being used, a bill for guests can be opened when the reservation is created and not necessarily when the guest is checked in. Deposit, cancellation, no-show, or an upselling charge can be posted to a hotel folio.

For Guests: Review Your Hotel Bill Carefully Before You Settle It

Before we dive deeper into understanding folios, we accept that charges in the folio are not always accurate due to human or system error. Hence, it is important to carefully review the folio to ensure you are being billed legitimately. For instance, say you ordered room service for a single taco two days back that you might have forgotten; there is a chance you could have been billed for double. Or, the entire restaurant check might have been posted twice due to a system error.

By carefully reviewing the hotel’s folio and checking with hotel staff for clarification, you can avoid any unnecessary charges. In case of a bigger dispute, you can escalate it to even hotel management.

Let’s dive into the details.

What Is A Folio In A Hotel, And What Makes A Perfect Folio?

• Clarity is King: The folio should be easy for the guests and hotel employees to understand, with clear descriptions of each charge and the corresponding dates. Avoid using jargon or abbreviations that might leave both the guests and new employees confused.
• Transparency is Key: All charges, including taxes and service fees, should be displayed with clear descriptions. Don’t hide anything in the fine print.
• Customization Matters: Consider offering guests the option to access their folio electronically, allowing them to review and query charges at their convenience, even before the checkout. For instance, with IP TV integrations with hotel PMS, guest can view their current charges on TV screens on demand.
• Efficiency is Essential: Ensure a smooth checkout process by enabling multiple payment options to settle guests’ bills and minimizing wait times.

Defining Types of Hotel Folios

Even though the folios serve a common purpose and format, traditionally hotels identify them as one of the below types to simplify day-to-day operational understanding.

Remember, a hotel folio definition is a representation of a guest bill containing running charges and payments of a guest’s account. And, in hotels, a bill has to be associated with a guest room. However, when there are needs to post charges to a bill, which doesn’t have a real room involved, it is done through a house account (see staff folios below):

Understanding and Hotel Folio Meaning (Guest Folio in The Front Office)

Guest folios represent the billing items that are directly charged to a guest, such as charges and payments (made by the guests). For example, if you are an individual traveller and not booked by a company for a business trip. Or, if your visit is for business purposes and the company pays for the room and food & beverage while you pay for the other charges.

In the first example, you solely pay for all the charges – there is only one bill. In the second example, there are two bills/folios: 1. paid by you for miscellaneous charges and 2. Room and Food and beverage charges paid by your company.

Understanding Hotel Company Folios

Company folios are the ones that are going to be sent to companies as invoices. As in the above example, if you visit for a business purpose and your company pays for the room and food & beverage charges, the hotel sends the folio for the bill that contains room and food & beverage charges to collect payment.

Understanding Hotel Master Folios / Group Folios

Master folios or group folios contain charges posted to the main bill where all group member charges are posted to. For example, if you visit the hotel as part of a tour group, you don’t pay anything at the hotel since you have already bought your tour package from a travel agent or a tour operator.

Therefore, the hotel collects the charges of each group member into a single bill to be charged to the tour operator.

Understanding Hotel Staff Folios (Sometimes Referred to as ‘Employee Folio’)

Staff folios, guest folios, or non-guest folios are bills that hotels maintain for posting charges but there is no real guest room involved. Examples can be staff purchases that will be deducted from wages later or post charges of a walking guest who uses the facility for a few hours, like a business centre. Or, a hotel guest who skipped the hotel without settling the payment, and the hotel wants to keep the bill open till a settlement is done. In these cases, the hotel will move the bill to a staff folio till the issue is resolved.

A folio is essentially a fictitious room bill (also called house accounts), or in Opera PMS, called PM rooms.

Some PMS Systems Can Have Additional Types of Folios

Depending on what property management system the hotel uses, there can be below folio types:

• Proforma Folio: A folio contains the expected/estimated room charges, room rates, taxes, and any other fixed charges.
• Deposit Folio: This is also a pre-stay folio. As said before, when the guests pay a deposit to confirm their booking, The hotels must send guests with deposit folios rather than mere payment receipts in some countries.
• Group Folio: For instance, travel agents have arrangements with hotels and they block a large number of rooms for a certain period (mostly during low seasons) at usually a lower rate. They fill the allocated rooms with their guests who have already paid the travel agent for hotel rooms, so they don’t settle or pay their bills at the hotel, but the agents do. What hotels do is, post the room charges of each of these guests to a common bill, and when this bill is printed, it is a group folio.
• Informational Folio: It is a folio, usually printed on a guest’s request but not finalized. Each final folio has a unique Folio Number/Invoice Number; however, an informational folio doesn’t have a hotel’s Folio Number/Invoice Number.
• Interim Folio: When the folio is not closed, but the guest pays for the outstanding balances and continues to stay, an interim folio is printed with a folio number.
• Final Folio / Checkout Folio: These are settlement folios printed when the guest checks out by settlement charges. This is when the debit and credit must be equal (See below for folio Debit and Credits).
• AR Folio (Accounts Receivable): Companies sign agreements with hotels to send their employees on a credit basis, and settlement is usually after 30 days. When these company staff check out, hotels send these folios as invoices to companies and follow up for payment.

Purpose of A Hotel Invoice

Importance of A Guest Folio In Hotel

What is the purpose of a folio? Folios are more legal docs than mere stationery. For the guests, a hotel folio, meaning they serve as itemized descriptions of their charges and payments and proof of settlement documents. For instance, a guest might want to see his bill during the stay, hotels print an informational folio (not finalized) whether a detailed or summarized list of items for him/her.

Billing Records In A Folio

When we say a folio represents a guest’s bill, it is the summarized view of detailed billing records where the charges/payments are posted. It not only simplifies guests’ reading of their bill but also helps other instances such as below:

Certain countries enforce their legal requirements through the folio. For instance, a government authority to trace and validate the hotels pay the taxes fairly. So, each guest’s billing record is electronically sent to the authorities for this purpose, and it is achieved through sending the folios.

Account Summary

For companies, folios are part of their accounting system, and they call it invoices. For example, a company guest’s bill is either fully or partly settled by the company. For payment collection, the hotels send invoices to the companies. These invoices represent a copy of the final folios. And, the same is applicable for OTA (online travel agents), government guests, and the guests who the travel groups book.

For hotels, it helps maintain account summaries and the aging of each company.

Guest Transaction History

In any PMS system, a guest’s transaction is recorded in the database, including any cancellation fees. It is kept for reprinting an informational folio at a later stage if there is a need, such as a legal case or audit purpose. However, not all systems are capable or are set up to keep historical records indefinitely.

In such a case, a printed copy stored physically or a PDF format sent through email can help trace transactions. Modern PMS systems are capable of storing PDF copies of final folios attached to guest profiles.

Further Understanding Your Hotel Folio

Understanding folios: a folio is a statement of charges and payments posted to a guest’s bill by the hotel. Throughout the hotel industry, the hotel staff often interchangeably use the terms invoice and bill.

Like in any statement, there is a debit side that includes charges, such as room charges, food and beverage, additional charges, and taxes and fees, which the guests have to pay the hotel (left side). And there is a credit side where any payment from the guest sits (right side).

Components of A Hotel Folio

Have a look at the below sample folio before we dive a bit deeper.

Hotel Folio Example

Here is a sample hotel folio receipt:

Looking at the above example of guest folio, it’s not a fancy one – we just recreated it. However, the folio provides all the details and sample charges defining a hotel guest folio. Let’s note the following points:

Itemized Charges

A folio should have the header with hotel, guest, and booking information, followed by the ‘detail’ section where the itemized postings are listed, which includes charges and payments. In this section, let’s check some of the items that get into this:

Room Rate

Room charges are the primary sales of any hotel, followed by food and beverage. Nightly room charges are posted on folios at the time of the night audit process. However, in the case of a Day-Use guest (the guest checks in and checks out on the same day) or departing earlier than originally booked, room charges are posted instantly by the system or manually.

Room rates are not always the room revenue, for instance, for an inclusive Bed and breakfast guest, it can combine room revenue and food & beverage revenue as well like for a room rate of 100$, it can be 70$ room revenue + 30$ breakfast. However, the guest on the folio sees a single line of ‘Room Rate 100$’.

Taxes

Depending on the country’s regulations, whenever a revenue is posted, a tax is automatically added by the PMS system. Again, depending on the regulations, taxes can be included with the main revenue charge; for example, you see a single line, ‘Room Rate 100$’ in case of inclusive taxes. Or, it can be ‘Room Rate 100$’ in 1 line and ‘Room Tax 12$’ for 12% exclusive taxes.

Food & Beverage

Similarly, food and beverage charges.

Incidental Charges

Revenue that is not room revenue or food & beverage charges is considered incidental. Usually, Laundry, Telephone, Miscellaneous, Minibar, etc.

Credits And Adjustments

Credits in a bill/folio are usually, payments such as cash, credit cards, etc. They usually sit on the right side of the debit/credit bill/folio. Adjustments are corrections and discounts given to a posted revenue charge. These are usually sitting on the left side of the debit/credit bill, preceded by ‘-‘ (minus) in front of the figure.

What Is ‘Folio Balance’?

When the guest checks out, the hotel subtracts the guest’s charges from any payment he made earlier, such as a deposit to settle any outstanding balance. When the guest’s consumption (debit) is more than what the guest paid before the checkout, he/she pays to settle the outstanding balance. When the guest’s payment is more, the hotel refunds the guest to reach a folio balance – the debits equals the credits.

Hotel Bill Format

A hotel bill format can be flexible. However, it should be informative enough not to leave room for guests’ confusion and adhere to regional legal requirements.

The above hotel bill format meets the basic requirements. Later in the post, we cover the details of all the fields.

Download Hotel Bill Formats:

Open Folio

The concept of Open Folio comes from Opera PMS, even before Oracle acquired the company Micros in 2014. The feature is very simple but useful when a hotel wants to vacate the guest room while the folio is not settled – debit/credit does not equal zero, as we said before.

This can happen due to several reasons, such as the guest’s credit card not working, a technical fault, or the guest checking out while still wanting to spend some time at a restaurant and expecting charges back to his bill. In these situations, hotels can move/disassociate a guest’s bill along with all the postings from his room to a fictitious room so that the original room can be sold to another guest.

This is an Open folio situation since the hotels can still post on the bill, change the departure date, and settle the charges whenever they are ready to.

Difference Between Folio And Receipt

The hotel invoice serves as a statement of charges and payments with description, date, and sometimes time to clarify guests’ expenses and ensure transparency between guests and the hotel on how the guest balance reached there.

A receipt is a proof of payment, like in any business, printed for guests to acknowledge that the hotel has received a payment from them at any time a guest makes a payment. At the time of checkout, some hotels provide an additional receipt, and some don’t unless the guest asks for it.

Types of Folio In Hotel Billing

How many types of folio in the hotel is irrelevant once you understand how hotel billing works. Every time a hotel sells its products or services or receives an advance payment from a guest, a relevant entry has to go into the particular guest’s hotel billing to maintain financial records.

These transactions are posted manually by a hotel cashier or auto-posted by the PMS software, such as room postings during the hotel night audit process. Charges are also posted by other systems, such as point-of-sales, telephone, etc., that have been integrated with the hotel’s PMS.

A folio is crucial for another reason: it is the first entry point for a transaction. These transactions sit in the guest’s hotel billing that front office staff can print as folios during the guest stay as informational or at the checkout as final folios. It can also be reprinted after the guest is checked out.

Behind the scenes, every entry done on the hotel billing goes way beyond printing folios to submit to the guest. A hotel’s operation is a complicated business that depends on various ledgers and financial reports for accountability, reporting, and revenue management.

If you’re interested in learning the different types of folio styles available in Opera PMS, you may check it.

Remember, there is no standard format for folios when it comes to aesthetics as long as a folio provides the crucial information printed on it. Even though some hotel chains do have a set standard, regional legal requirements take precedence.

For additional information, please check out this page.

Hotel Folio: Frequently Asked Questions:

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